The Central Bank of Nigeria (CBN), over the weekend, released revised guidelines for the Nigeria Foreign Exchange Market (NFEM).
According to a circular signed by the Director, Financial Markets Department at the apex bank, Omolara Duke, the new regulations supersedes all previous key forex policy documents, such as the circular on the establishment of the Investors and Exporters’ (I&E) forex window in 2017, the operational changes to the forex market that the CBN announced on June 14 last year and the revised guidelines for the operation of the Nigerian Interbank Forex market.
Specifically, the new guidelines restrict all transactions in the NFEM to only authorised dealers and prohibits dealings with unlicensed with unlicensed intermediaries.
Also, the guidelines states that licensed Bureaux de Change (BDCs) are permitted to buy forex from authorised dealers subject to the aggregate monthly cap stipulated by the CBN.
Furthermore, according to the guidelines, all market participants are expected to adhere to the highest code of ethics and professional conduct in the NFEM in line with the Nigerian FX Code.
Under the new rules, Bank boards, CEOs, and Chief Compliance Officers are also required to annually attest to their compliance with the Nigerian FX code.
Another highlight of the revised guidelines is that all pricing of forex transactions in the NFEM will be undertaken on the Electronic Foreign Exchange Matching System (EFEMS), which comes into effect today, December 2, 2024.
On interbank trading, the guidelines stated that Market Makers will be designated in the interbank market who will be required to mandatorily provide daily two-way quotes in standard amounts and spreads.
